By DELPHINE MATTHIEUSSENT
The Associated Press
Thursday, July 13, 2006; 5:11 PM

SAFED, Israel -- Hotels in northern Israel sent guests packing. Hospitals moved patients to the basement. Schools shut down. And residents of Haifa, Israel's third-largest city, were warned to stay near bomb shelters.

More than 120 Hezbollah rockets and mortars slammed into cities and towns across a wide swath of northern Israel on Thursday, triggering widespread anxiety in the usually tranquil region. Two people were killed and about 50 wounded.

After threatening to attack Haifa for the first time, Hezbollah followed through within hours, hitting the city of 270,000 with two rockets. The attack caused no injuries but may have had the deepest impact on Israelis, leaving many fearing that nowhere was safe.

"We're living in a war zone," said Herut Tamari, 66, who runs a pottery business and guest house in the border town of Metulla.

It was the heaviest barrage of northern Israel in decades. Guerrilla rockets traveled farther than before to hit regions, previously out of range, inhabited by half a million Israelis. One rocket even hit the headquarters of the Israeli army's northern command.

"I am sure the residents of the north all know that all citizens, in these difficult hours, are praying for them and worrying about them," President Moshe Katsav said during a tour of the northern town of Nahariya, which was hit repeatedly.

As Katsav walked through the town, another volley of rockets landed nearby amid a group of journalists, lightly wounding one. Katsav's security detail rushed him into a nearby building.

Safed, the home of Judaism's mystical Kabbalah sect and the center of life in the region, became a ghost town after seven Katyusha rockets hit, killing one person and wounding eight others. The last time an Israeli civilian was killed near the border was in anti-aircraft fire in August 2003.

Shops shut down and the winding cobblestone streets of the old city were deserted. The sound of rockets exploding could be heard in the background.

Broken glass covered the street in the center of Safed, a city of about 30,000. A small crowd gathered to gawk at a damaged furniture shop. An immigrants' center and a college were also hit.

The only open store in the area was a grocery whose owner, Alain Bensadoun, said the current barrage was worse than previous attacks in the 1980s. He said his niece fainted and was taken to the hospital when a rocket exploded nearby.

"I'm not scared. I'm not scared of Hezbollah or anyone. If God wants to call me, he will anyway," he said. "This is war. ... If we are not strong, it will go on forever."

The violence started Wednesday when Hezbollah guerrillas captured two Israeli soldiers and killed eight in attacks on Israel's northern border.

In response, Israel hit southern Lebanon with waves of airstrikes, blasting Beirut's airport and army bases in its heaviest air campaign against its neighbor in 24 years. Four dozen civilians were killed, Lebanese officials said.

Senior Israeli officials said Thursday their offensive in Lebanon was open-ended and would try to push the militants away from the Israeli border.

"We cannot allow ourselves to let them stay there," Foreign Minister Tzipi Livni told Israel's Channel 10 TV.

In Nahariya, a Mediterranean resort town of 50,000, cars with suitcases tied to the roofs headed south after Israel's Home Front Command ordered hotels and guest houses to shut down. One woman was sitting on her fifth-floor balcony when a rocket hit her building, cutting through the ceiling and killing her.

Nahariya Hospital was on high alert, and the deputy director, Moshe Daniel, said all elective surgeries were canceled. Doctors evacuated the top floor and moved the patients, most of them children, to the basement, along with dozens of women in the maternity ward.

One of the basement rooms was packed with about 30 new mothers. Doctors rushed back and forth and babies cried. Golan Elbachli, 31, stood with his wife looking into a crib at their second child.

"This doesn't affect her. She's sleeping like a queen," Elbachli said of his newborn daughter. "Her mother, it affects."